Funding 101: Creative Funding for University Rec Centers

State funding cuts for universities have turned some rec center directors into entrepreneurs as they seek additional revenue sources.

Some rec center directors are finding themselves in a bit of a bind these days. Students come to college looking not just for superior academics but also for high-quality rec centers and programming, and multi-million dollar rec centers are being used as recruiting tools for more than athletes. But the economy has caused states to cut or flatten funding of higher education. The end result is that directors now must think like entrepreneurs and find new sources of funding.

For most colleges and universities, student fees cover the lion's share of the cost of running recreational programs. Student tuitions have increased faster than the inflation rate during the past 10 years, but student fees have remained relatively flat at most colleges and universities — although trends vary from state to state depending on state laws and policies.

“It's a little more difficult to diversify and grow programs due to the stagnation of funding,” says Joe MacLean, director of recreational sports at Texas Tech University. At Texas Tech, the student government association approves the student fee each year.

“We have not raised fees in the last three years,” he says.

MacLean's program receives $4.7 million in student fees each year and only $500,000 in state support. The remaining $1.2 million of his budget comes from outside sources.

“The student fee helps cover operating expenses,” says Maureen McGonagle, director of campus recreation at DePaul University in Chicago, who adds that the situation at DePaul is similar. “But it helps to have supplemental income.”

Funding for the rec center at Florida International University in Miami is allocated through student government, says Rob Frye, director of recreational services. Around 80 percent of his department's revenue comes from student government funding, representing about $15 per semester per student.

“Those who have a dedicated fee are probably in a stronger fiscal position,” says Mike Waldron, president of the National Intramural-Recreational Sports Association (NIRSA) and associate director for business services at Texas A&M University's department of recreational sports.

Student fees generate about $2.1 million per year for the rec center at the University of Maine, according to Jeff Hunt, director of campus recreation. Much of that money goes to repay the bond issued to build the three-year-old facility. The rec center's budget is $2.9 million.

In 1997, central administration funded 53 percent of the University of Arizona's student affairs budget, which includes recreational programs. Today, that number has dropped to 35 percent. Frank Farias, assistant vice president for student affairs at the University of Arizona, blames cuts in state allocations.

“That is something everybody has been experiencing in Arizona,” he says. “The state has continually been declining allocations to higher education, period. So the impact has been across the board.”

But Farias doesn't let this get in his way.

“What we've basically been forced to do is think in a more entrepreneurial way,” he says.

Many university rec center directors are adopting more of a business mindset these days to meet their funding needs. They have transformed the way they fund their multi-million dollar programs, depending more and more on creative sources, such as sponsorships, pro shops, equipment and facility rentals, paid programming and community memberships. At many universities, students must now pay to participate in intramural or club sports — activities that were once traditionally covered by student fees.

The University of Maine's rec center finds its funding in many of these areas and more. It generates $630,000 in revenue annually from outside sources, including community memberships, equipment rentals, group exercise class fees, personal training fees, snack and drink sales, sponsorships and summer camps for area youth. The center's outdoor adventure program generates another $100,000 per year.

OPEN TO THE COMMUNITY

Often, these entrepreneurial efforts involve inviting in the community outside the campus, whether to rent event space in the facility or to join as members. This option not only helps bolster the recreation programs' bottom line but also helps universities and colleges be neighborly.

DePaul offers one example. The university extends memberships to alumni, faculty and staff, voluntary students (graduate and part-time students) and community members in close proximity to the campus.

“For us, the largest chunk of outside money is from memberships,” McGonagle says, though she admits that it takes balance to provide services to both students and the community. Still, that extra work can be worth it as community memberships can increase the breadth of programming at the facility, she says. A Pilates class attended by only a handful of college students can continue to meet if external members round out the class.

Last year, the poor economy forced the city of Tucson, AZ, to close 17 public pools. Meanwhile the University of Arizona's outdoor, Olympic-sized pool was virtually unused during the summer.

“We're now looking at how to partner with the city and get grant monies,” Farias says. “We have a lot of capacity that goes unutilized.”

The University of Arizona's recreation program also rents banquet space to campus and community organizations.

“That's one of the things that we want to start marketing,” Farias says.

A more traditional funding stream comes from summer camp rentals by outside groups — an almost common service offered by colleges and universities. Then there are equipment rentals, including canoes, bicycles, skis, snowshoes, tents, and backpacking and rock-climbing gear.

Many university rec centers also offer fee-based services to students, faculty and staff, including massage and personal training.

But none of these efforts are free. Although MacLean says that budget cuts have prevented him from creating any new full-time positions for a long time, he says that before the economic downturn he had to hire a full-time employee to run summer camp programs. The camps previously were headed by a graduate student, but the size of the program demanded more attention than a student could offer.

“We try not to pass some of these costs to the users, but that's where the philosophy is going now,” MacLean says.

SPONSORSHIPS

Sponsorships are a typical source of revenue for university athletic programs, but they are less common in higher education recreation programs. The University of Maine has received a few small sponsorships, including one from Subway for a “Biggest Loser”-type contest, but Hunt says that he is looking for more of them.

Texas A&M has received sponsorships from about 14 organizations, including the U.S. Marine Corps. Waldron chooses those sponsors carefully.

“From a university standpoint, we have to be careful with how we align ourselves with a particular brand,” Waldron says. “You don't want to turn yourself into a NASCAR race car with every sticker. That's unseemly.”

When seeking sponsorships, there is a need for a clear distinction between athletics and recreation.

“What we have found when we go to typical sponsors is they are already tied into the athletic programs,” MacLean says.

Farias is looking at leveraging sponsorships across student affairs' venues.

“Those are opportunities for companies — local or national — to promote their brand and services,” he says. “We can enter into contractual relationships for the year and offer different options.”

But that means not stepping on the toes of athletic programs.

“We're not trying to compete or take away from campus athletics,” Farias says.

ENDOWMENTS

A more unique source of funding from which the University of Maine has benefited is endowments. A recent gift of $450,000 was made to the university rec center, and the center uses the roll off from that investment for maintenance of the facility.

“That's a huge thing for us,” Hunt says. He can use the money to keep up with painting, flooring and other maintenance issues that might get deferred at other rec centers due to lack of money.

“I think we're seeing that happen more often,” he says about endowments to rec centers, “although most people who give to universities give to athletics and to scholarships. It's not widespread, but I think it's growing.”

Whether funding comes from endowments, sponsorships, student fees, community memberships, group exercise fees or other sources, Hunt says that it is a new world now for rec center staff and funding, and he doesn't expect that world to revert back even after the economy improves.

“It's a new way of operating,” he says. “It's the wave of the future for rec centers and for other areas on campus.”

Most university administrators are well aware that the benefits of a fully funded recreational program are so strong that creative efforts are necessary to keep these facilities and their programs funded. These programs have become part of the landscape of higher education, and the professionals who run them are now committed to growing and maintaining them in ways they may not have considered years ago.

Welcome to the Community

When a university opens its rec center to community memberships, it also opens itself to potential problems. The influx of community members can cause overcrowding, which is why Florida International University in Miami does not offer community memberships, says Rob Frye, director of recreational services.

But perhaps the biggest criticism might come from area club operators who might contend that the rec center is competing with them.

Jeff Hunt, director of campus recreation at the University of Maine, says that when his rec center opened in 2007, the local Y took a hit as students switched their memberships to the rec center.

“The Y in the first year after that struggled, but they realized that they had a different niche,” he says. “Theirs is more family oriented, and they've moved in that direction.”